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14. The Buying Process for Massachusetts First-Time Homebuyers

So, you want to buy a house in Massachusetts—now what? The first time buying a home is an emotional, exciting, and also exhausting experience. You may also be wondering along the way—what am I missing? This is a common question. Here’s how the buying process works from start to finish:

Do some preliminary online searching. Check into what homes are selling for in the areas you’re interested in to give you an idea of what you’re looking for. This will help later on when communicating your wish list with your real estate agent.

Budget. Use an online mortgage calculator to determine what your monthly mortgage payment would be if you were to purchase one of these homes you’ve found online. Make some additional estimates for utilities and see if this fits into your budget. Fannie Mae recommends buyers plan to spend less than 28% of their total income on housing.

Get pre-approved. To get pre-approved for a mortgage you’ll need to get some paperwork ready: pay stubs, W-2s, bank account statements, tax returns for the past two years, and credit lines, and names and addresses of your landlords for the past two years. Start with your current bank, but make sure you check out competitor banks as well – you might get a better mortgage loan rate by shopping around. Also, consider the amount your lender approves you for as a maximum – this is by no means what you should spend.

Save your pennies. At least 3-5% to be precise. Many first-time home buyer programs offer minimum down payments as low as 3% to 5% (vs. the standard 20%), and a few require no down payment at all.

Find an agent. A good real estate agent will help you navigate the process every step of the way. Your friends and family will be great sources—see if any of your trusted contacts have someone they recommend.

Look at homes. Be patient at this stage. Your real estate agent may show you a variety of homes to get your reaction on features they think you’ll like. Give your agent detailed feedback so they can show you homes that are perfectly suited to you. Sometimes, this process can take months or years—So be patient. Also, make sure you let friends and family know you’re looking for a new home–you may even find out about an amazing home before it hits the market.

Make an offer. Once you’ve found your Lowell dream home, you may want to move quickly. Your agent will guide you on a reasonable first offer to start negotiations based on market conditions. Also, make sure you consider closing costs which could account for 2-5% of the home price.

Negotiations. Prepare to go back and forth with the seller a few times on price and selling conditions. Your real estate agent will be your advocate here and try to get you, their client, as much as possible for your money while being fair and respectful to the seller and their real estate agent.

An accepted offer. Pop the champagne! If you reach an agreement, you’ll make a deposit to an escrow account to show good-faith. Escrow is usually 30 days where the seller takes the house off the market with the contractual expectation that you’ll purchase the house—provided you don’t find any serious problems during the inspection.

Do a home inspection. Even if the home appears to be flawless, there’s no substitute for having a professional inspector review the property for quality, safety, and general condition of your potential home. You don’t want to be surprised with a Lowell home that needs a lot of unexpected repairs. If the inspection reveals undisclosed serious defects, you can negotiate further to have the seller make repairs or discount the selling price. You’ll also likely have the option to withdraw your offer and get your deposit money back.

Closing. When your negotiations with the seller are successful, and the inspection comes back clean, you should be ready to close. At your closing, you will spend a little over an hour signing lots of paperwork and then receive the keys to your new home.

Moving out of your home and into your new one. This is a busy and exciting time! Have fun!

If you’re ready to buy but aren’t sure how to get started, check out some more Massachusetts homebuyer tips and reach out to your local real estate pro for guidance when you’re ready to get the ball rolling.